I move:
That a sum not exceeding £1,545,920,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1989, for the salaries and expenses of the Office of the Minister for Social Welfare, for certain services administered by that Office, for payments to the Social Insurance Fund, and for sundry grants.
This Estimate for my Department for £1,545,920,000 is the amount which the Exchequer provides for social insurance and assistance services. The Exchequer meets the full cost of social assistance and part of the cost of social insurance. The bulk of social insurance expenditure is met by employer and employee contributions. When these are taken into account the total expenditure of my Department is over £2.6 billion or £50 million a week. Of this amount 30 per cent represents payments to the elderly and 26 per cent to the unemployed.
The measures taken by the Government to extend social insurance coverage to the self-employed have brought about a significant increase in contributions and consequently reduced the overall demand on the Exchequer. The net cost of social welfare services would have been £39 million higher but for the extra PRSI income received from the self-employed this year. Significant savings have also resulted from increased employment leading to an increase in PRSI income and a fall in the cost of unemployment payments. The measures we have taken to improve the management of the social welfare system and to control abuse and fraud have also resulted in significant savings to the taxpayer. This Estimate includes provision for a further saving of £27.5 million through specific control and antifraud measures. These measures have improved significantly the financing of the social welfare system and have enabled me to preserve all our social welfare services and to provide for major improvements and new initiatives.
The full year cost of this year's budget increase is £156 million of which £50 million is for special increases. We will continue the policy of providing special increases for the long-term unemployed as resources permit.
Regarding improvements in payments over the past two years we not only maintained the value of all social welfare payments but also provided significant additional resources for special increases to those in greatest need. Our approach shows our practical commitment to improving the position of all who rely on social welfare. We focused mainly on families, specifically families of the long-term unemployed and families or workers on low pay. Last year we provided an increase of 11 per cent in the personal rate for the long-term unemployed and recipients of supplementary welfare allowance. A further special increase of 12 per cent for the long-term unemployed was provided this year and comes into effect today.
Taken together with the increases given last year, these payments have risen by almost 25 per cent since then. In practical terms, the weekly payment to a family with five children on unemployment assistance has been increased over the past two years from £106.10 to £127, an increase of £20.90 per week.
In addition to these special increases, the real value of all other payments has been maintained. This year a general increase of 3 per cent applies from this month. The higher rates of pension (old age, invalidity and widows), of disability and injury benefit, maternity allowance and of supplementary welfare allowance will be payable from next week. From today the personal rate of long term unemployment assistance increased from £42 to £47 per week. The rate for a family with three children increased by £8.20 to £107.
The Estimate also provides for the cost of abolishing the lower rural rate of unemployment assistance with effect from today. Since 1934 when the unemployment assistance scheme was introduced a lower rate of assistance has applied to claimants living in rural areas. The Government considered that such a differential is outmoded. People in rural Ireland face essentially the same cost of living as urban dwellers. Furthermore the present situation has led to serious anomalies in that many areas now accepted as urban are outside the urban classification. Claimants of unemployment assistance in parts of Tallaght, Blanchardstown, Clondalkin, Dún Laoghaire and Lucan were paid at the rural rate until today. Similar difficulties arise in other areas such as Cork, Limerick, Dundalk, Drogheda, Ballina and many other towns.
The Government agreed with my recommendation that the only logical step was to abolish the lower rural rate. From today all recipients of unemployment assistance will be paid at the higher rate. This is a very significant additional improvement for claimants in those areas formerly regarded as rural. It includes small farm households who have been recognised by the Government as a group in need of special assistance.
The supplementary welfare rate of payment, which was the same as the short-term rural rate, irrespective of where the claimant lived, will now also be increased to the higher rate. This is a very significant improvement for a group of people in urban and rural areas who are on the lowest level of social welfare payments.
The Estimate includes provision for other significant improvements in the levels of social welfare payments. The number of different child dependant payments has been reduced over two years from 36 to 12; a minimum child dependant allowance of £10 per week will take effect from today; child dependant allowances payable to long-term social welfare recipients have been extended from today to age 19 where the child continues in full-time education—this is an important improvement for families whose children want to continue in full-time education. The higher rate of child benefit is being extended to the fifth child from October next and new social assistance schemes are being introduced for widowers and deserted husbands who are bringing up children on their own.
The introduction of these new schemes means that the payments being made to a widower on supplementary welfare allowance with five children will increase from £80.80 per week to £115.30. This represents a very substantial increase of £34.50 per week. Some £1.4 million has been provided in this year's Estimate for these schemes which is equivalent to a full year expenditure of £5.7 million. These new schemes will come into effect from October next.
The Government have also this year directed additional resources towards low paid workers in two ways, first, by increasing the tax exemptions for low paid workers and, secondly, by making improvements in the family income supplement scheme and undertaking a major promotion of that scheme.
On the income tax side we increased the tax exemption limit to £6,000 for a married couple and brought in a new special tax exemption of £200 for each dependent child. This means that a couple with five children who have income of up to £7,000 a year will not now be liable for income tax. In addition, marginal relief is being applied where the couple's income does not greatly exceed the exemption limit.
Major improvements in the family income supplement scheme will take effect from next week. Overall expenditure on this scheme is being increased by 20 per cent to £6.1 million this year. The improvements include:
increases ranging from £2 to £21 a week in the maximum payments;
additional payments to families with six, seven and eight children;
an increase in the rate of supplement from 50 per cent to 60 per cent of the difference between family income and the relevant income limit;
the weekly income limits for receipt of payment will be increased by amounts ranging from £4 to £38 depending on family size; and
a reduction from 24 to 20 in the minimum hours of work required each week to benefit under the scheme. In the case of a two earner family, their hours worked now may be summed for eligibility.
In practical terms, the effect of these changes means that a family with five children who have a weekly income of £120 will qualify for a payment of £50 per week.
In addition to a new drive to promote FIS through information packs, fact sheets and community and other information services, we have also undertaken a major advertising campaign. The first indications of the success of this campaign, which Deputies will have noticed on the radio and in newspapers, are very positive. The average weekly claim intake has almost doubled. Telephone inquiries to my Department, following an initial peak, are now running at about twice their former daily average. It is too soon to fully assess the results of this campaign. Our information approach is aimed at maximising public awareness of our schemes and services. The response to the FIS advertising is gathering momentum as the message is repeated on radio and in the newspapers. I am confident that this response will be reflected in an increased take-up of the scheme. I want to pay tribute to the trade unions who have circulated their members with the information we have provided.
The FIS scheme has an important part to play in helping families of workers on low pay and will be kept under review. The scheme at present is designed for workers in full-time paid employment. I am examining the extent to which similar arrangements could be applied to other people on low earnings. Overall these initiatives show the determination of the Government to tackle the problem of low incomes, both for those at work and those who are unemployed.
Much of the pressure on the allocation of resources to social welfare has been eased by the introduction of more effective management and control. This ensures that resources are directed to those most in need and those genuinely entitled to support. Substantial savings have been achieved as a result of the measures I have taken over the past two years to combat fraud and abuses of the social welfare system.
These savings have helped me to devote additional resources to achieving greater equity within the social welfare system and to improving the position of those on the lowest payment levels. These savings are continuing and underlie the Estimate, resulting in a more cost effective and better directed service.
One measure I would like to mention in particular is the requirement I introduced for employers in certain industries—construction, cleaning, forestry and security — to notify me of all new employees taken on since 1 January 1989. For the first half of this year new employees notified in these sectors have totalled 7,850. These notifications are checked against an individual employee's social insurance and claims record to ensure that their social welfare record is in order. In about 250 cases some element of apparent fraud or abuse of the social welfare system was found and these cases are currently under investigation. A further 2,500 cases require further clarification though it is expected that most of these cases will in the event be found to be in order. This proves the effectiveness of this step as a control measure and as an important part of my fight against the abuse of social welfare. In the Social Welfare Act, 1989, I took powers to extend this arrangement to provide for notification where contractors or sub-contractors are engaged by employers in designated industries. The necessary regulations to implement this further step are in the course of preparation.
As I mentioned earlier, I will be bringing in new social assistance schemes for widowers and deserted husbands in October. The introduction of these new schemes represents a major step in bringing about equality of treatment between men and women in this area. Traditionally, the main responsibility for caring for children was assumed by mothers and the family was mainly supported by the income earned by the father. With the introduction of these new schemes, the Government have given recognition to the fact that widowers and deserted fathers may also be in this position. This Estimate provides for this major development, involving a substantial increase in income for those concerned.
With the introduction of these new schemes there will now be six separate social assistance schemes providing income support to lone parents. I am examining the possibility of replacing these schemes by one lone parent allowance scheme which would apply to parents, whether male or female, who are bringing up children on their own. Complex legislative changes will be required to provide for such a scheme but I hope to be in a position to bring forward proposals in this matter later in the year.
In line with the commitment given in the Programme for National Recovery, a detailed examination of the appeals system has been carried out. We are determined to ensure that this vital adjudication feature of the social welfare system is seen to be fair and independent by all our clients. We are committed to setting up a separate social welfare appeals office which will retain the best features of the present system in relation to accessibility, impartiality and efficiency. New procedures for processing appeals will be introduced and improved information will be given to clients.
Last year the number of new claims across all schemes requiring a formal decision was about 1.3 million. The number of appeals which were made amounted to only 17,000, less than 1.5 per cent.
The independence of appeals officers in the exercise of their functions is a vital part of the process. The courts have upheld that independence and clearly supported it. The main criticisms of the appeals system over the years have related to inadequate information about decisions, to the appeals procedures, to the right to an oral hearing and to the perception that appeals officers are too closely associated with the day-to-day operations of my Department. I will be addressing these issues over the coming months.
One of my priorities as Minister for Social Welfare will be to standardise means tests and introduce self assessment where practicable. I am examining how these assessments can be used to establish entitlement to schemes administered by my Department or other statutory agencies. This would simplify the process of claiming entitlements, reduce administrative costs and streamline the delivery of the services. I introduced a limited form of self assessment in unemployment assistance through desk top interviews. These have proved very successful. I am now examining the question of extending self assessment to other schemes. I hope to be in a position to announce details of the extension of self assessment and further standardisation of means tests later this year.
In introducing the Social Welfare (No. 2) Bill, 1989, in this House, I announced that the Government had decided on a fundamental review of the concept of the household for social welfare purposes. This examination, which is already under way, is being carried out by a review group under the chairmanship of Mr. John Curry who was formerly chairman of the Commission on Social Welfare. The function of the group is to identify ways in which the social assistance schemes could be adapted so as to ensure that the various household situations are treated in a consistent and equitable way. In the light of the outcome of this review, which is to be completed by November next, the Government will consider whatever changes are required in the system and these will be brought forward in time for next year's budget. The Oireachts will then have an opportunity to consider the various issues involved in the context of the associated Social Welfare Bill.
Deputies will be aware of my particular interest in making the social welfare system as flexible and as responsive as possible to the needs of the unemployed. I have taken a number of initiatives in this regard. The long-term unemployed from today have an option to receive either unemployment benefit or unemployment assistance, whichever is the more favourable to the individual claimant. This will remove any disincentive for the long-term unemployed in taking up short duration employment. Otherwise they could find that their rate of payment was reduced if they became unemployed again.
The part-time job incentive scheme provides the long-term unemployed with the opportunity to avail of the increase in part-time working which has been a notable feature of the labour market in recent years. Participants may work up to 24 hours and receive a weekly allowance of £30 for a single person or £50 for a married person with dependent spouse.
The educational opportunities scheme provides a second chance of education for older long-term unemployed persons who left school early. It is proposed to extend this scheme to a number of new centres in the autumn.
The part-time education initiative allows the unemployed to participate in part-time education courses without affecting their entitlement to unemployment payments.
The voluntary work option scheme is intended to encourage unemployed persons to get involved in voluntary work and to encourage voluntary organisations to involve the unemployed in their activities.
This year's Social Welfare Act enables me to make regulations deeming a person in certain circumstances to be available for work or to be exempted from the requirement to be available for work. I propose to make regulations under these provisions shortly providing that participation in certain educational courses will not affect entitlement to unemployment payments. I expect that this facility will be available to long-term unemployed persons in time for those who want to enroll in courses beginning in September. This latest initiative will complement the educational opportunities scheme and the facilities to undertake part-time education. Together they make the pursuit of educational qualifications a very real option for the long-term unemployed.
Other initiatives include a facility to allow unemployed persons to take up to two weeks holidays or to represent Ireland at international events while in both cases retaining their entitlement to unemployment payments.
In May last I announced new proposals for legislation to regulate occupational pension schemes. The necessary legislation is currently being drafted and I intend to introduce a pensions Bill before the House in the next session. This new legislation will be designed to protect the interests of members of occupational pension schemes.
Deputies will be aware of the substantial progress that has been made in improving the quality and the speed of the service we provide to the public. Our success in meeting changing and increasing demands on our social welfare system has been achieved through large scale computerisation, new management systems, revised working procedures, reorganisation of functions and the commitment on the part of the staff of my Department. I want to take this opportunity to acknowledge and pay tribute to their contribution.
Further progress now depends on the extent to which we can localise our services. This means providing a more comprehensive, more integrated, more streamlined and more secure service at local level. A key element in the localisation strategy is our continuing development of technology and the extension of our computer network. The new localised service means that the role of the local offices around the country will be expanded. All social welfare clients, not just the unemployed, will be able to claim or obtain information on their entitlements at local level. These local offices will give the public access to a more comprehensive and co-ordinated service. Closer working relationships will be established at local level with FAS, the health boards, the Revenue Commissioners and other State agencies.
A major development in our localisation plan and a radical departure for the provision of services to our clients took place yesterday with the opening of the new social welfare pensions office in Sligo. One hundred and fifty staff, formerly based in Dublin, were transferred to special purpose-built offices in Sligo as part of the Government's decentralisation programme. The transfer took place over last weekend with minimal disruption to clients. All old age pensions will now be serviced from Sligo. A further 150 staff covering survivors' and family benefits and allowances will transfer to Sligo before the end of the year. Special computer network facilities will allow for complete access from Sligo to all the data held centrally in Dublin. In addition special arrangements will allow for'phoning the Sligo officers at reduced rates which in most cases will be the cost of a local call.
We must ensure that information on social welfare is available to all when the need arises. I have taken a number of measures to develop our information service, for example, through closer co-operation with voluntary groups in providing information, through a new approach in advertising aimed at maximising public awareness of our schemes and services, through a policy of providing information stands at public events such as the Spring Show and by improving the content and design of our publications and information leaflets.
Our network of information offices in Dublin and around the country deals directly with inquiries from the public and distributes our booklets and information leaflets on all schemes and services. I am examining all options to ensure the best possible information service for our social welfare clients and the public at large.
The scheme of grants to voluntary organisations administered by my Department offers real support to voluntary organisations. Seven hundred and fifty thousand pounds was provided initially this year for grants to voluntary bodies engaged in providing services for deprived or disadvantaged persons in the following groups — children, young people, the elderly, families, single and abandoned parents, the disabled, the physically or mentally handicapped and other persons needing social services. So far, grants have been allocated to 100 organisations. In addition, a further sum of £100,000 has been provided for the loan guarantee fund to help those who need assistance to escape from the grip of moneylenders.
I launched a new grant scheme for voluntary bodies last July. In 1989, £50,000 has been made available for grants to voluntary bodies for schemes involving unemployed people in community and social services activities. This new grant scheme complements the voluntary work option.
A further £600,000 has been allocated to two other voluntary bodies—£500,000 to the Society of St. Vincent de Paul and £100,000 to the Samaritans. The Society of St. Vincent de Paul will undertake, in consultation with me the expansion of their employment projects scheme, continue their programme of home management courses and develop their network of good as new shops. The special once-off grant to the Samaritans will enable them to develop their drop-in facilities and expand their outreach programme.
The Programme for National Recovery — The Next Phase and the Programme for Government 1989 — 1993 highlight the priorities in relation to social welfare for the next four years. I am particularly pleased that they endorse and continue the policies of protecting the less well off in our community and improving the levels of social welfare payments.
My Department provide very important services for a vast number of people. We are the largest spending Department in the State. Numerous issues arise trying to meet all the needs of such a large number of people. In the short time available to me today, it has been possible to touch on only a few of these issues. I look forward to the contributions from Deputies to this debate. I commend the Estimate to the House.